After two seasons my engine has started to overheat... at cruising speed on the tach it reads 1800 rpms... Temp rising to 200 degrees.

My engine is fresh water cooled with a heat exchanger... I've checked the both the raw and fresh (glycol) water pumps the impellers are intact and good no missing parts. Changed them out last year. Fluids are topped up in the heat exchanger.

I have changed out the raw water intake hose from the seacock to the V drive ... I noticed it was collapsing to an oval shape along the hose all the other hoses are fine.
While changing out to old hose, I opened the seacock, hose off and water flow freely... Engine still over heats.

Checked the out flow of water at the exhaust port at the back of the transom... Good flow and the exhaust water is hot along with some steam it never seems to go away while the engine is on.

Took out the 3 spring Holly thermostat and discovered that it was stuck in the closed position, dipped in vinegar overnight and cleaned.. Tested it in a pot of water over the stove. Tests showed that it opened at 140 degrees... Did this three times. Thermostat is not the problem since the engine still overheats to 200 degrees.

Next steps... I need to pull the hoses at the T-connecter and the intake and outflow on the exhaust manifold and check for blockage.

If there is no change to my engine overheating... Does this mean and acid flush??

I've done all I can to deduce the reasons as to why my engine is overheating... The engine runs smooth other than the overheating issue

Tough to tell whether you have an engine issue or a heat exchanger issue.
First thing I'd do is remove the thermostat and leave it out until you get the overheating under control. See what happens without the thermostat. If you have a bypass valve, close it. If not, plug the bypass hose.
If still running hot, I think I'd convert back to raw water cooling temporarily. If this runs cool, then you have a heat exchanger issue. Remove and clean.
If still runs hot with raw water, then it's an engine issue and you'll have to find the blockage.
Try disconnecting pieces of the cooling system and blowing through the hoses. If you can't blow through the manifold, check the manifold outlet - classic place for stuff to hang up. Blow through the hose from the water pump to the block - piece of dead carp hung up in the inlet to the side plate? You get the idea.
Worst case I see is that you'll have to remove the head and chip the corrosion deposits out of the small passages adjacent to the valves. I think an acid flush would be a waste of time/effort.

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Tough to tell whether you have an engine issue or a heat exchanger issue.
First thing I'd do is remove the thermostat and leave it out until you get the overheating under control. See what happens without the thermostat. If you have a bypass valve, close it. If not, plug the bypass hose.
If still running hot, I think I'd convert back to raw water cooling temporarily. If this runs cool, then you have a heat exchanger issue. Remove and clean.
If still runs hot with raw water, then it's an engine issue and you'll have to find the blockage.

Thanks for the alternative steps in diagnosis... I have run it without the thermostat climbs to 160 and holds... I didn't push the engine past that.

I'm beginning or shall I say hoping the problem is in the manifold. I really don't want to tear the head apart if I can help it.

No need to stress yourself yet about removing the head. Just check the manifold outlet. That is where obstruction usually occurs. There could be junk (impeller pieces? rust?) visible at the outlet as soon as you open it up. You might be able to remove the bigger pieces with needle nose pliers.
This not a pressure test, but an airflow test. Blow through a hose into the manifold inlet with the outlet open, and see if any crud comes out, or if you feel any resistance. If there is little or no airflow when blowing hard through a hose, and you can see no crud at the outlet, run water from a hose into the intake of the manifold, and out of the outlet into a bucket with another hose. Much easier than removing the head. Flushing the manifold is not a winter project, should take a day with the right hose fittings. No need to use acid, just water pressure. Check running temperature after flushing the manifold. If it is still at 160 with no thermostat, look in the heat exchanger.
Besides, if your engine holds at 160F with the thermostat removed, you no longer have an overheating problem. Your thermostat when open at 140F apparently still obstructs the flow enough to increase temperature by 40F, which combined with the other obstruction, makes the engine overheat. Running without a thermostat is common. Without a thermostat it should run lower than 160F, so there is evidence of a blockage, probably at the manifold outlet. My thermostat keeps the temperature at 160. Let us know what you find at the manifold outlet.

If you proceed directly to removing the head you eliminate the ability to make two of the most important diagnostic tests we have, compression and cooling system pressure tests. In addition, you eliminate the option of a cooling system acid flush until the engine is reassembled.

No need to stress yourself yet about removing the head. Just check the manifold outlet. That is where obstruction usually occurs. There could be junk (impeller pieces? rust?) visible at the outlet as soon as you open it up. You might be able to remove the bigger pieces with needle nose pliers.
This not a pressure test, but an airflow test. Blow through a hose into the manifold inlet with the outlet open, and see if any crud comes out, or if you feel any resistance. If there is little or no airflow when blowing hard through a hose, and you can see no crud at the outlet, run water from a hose into the intake of the manifold, and out of the outlet into a bucket with another hose. Much easier than removing the head. Flushing the manifold is not a winter project, should take a day with the right hose fittings. No need to use acid, just water pressure. Check running temperature after flushing the manifold. If it is still at 160 with no thermostat, look in the heat exchanger.
Besides, if your engine holds at 160F with the thermostat removed, you no longer have an overheating problem. Your thermostat when open at 140F apparently still obstructs the flow enough to increase temperature by 40F, which combined with the other obstruction, makes the engine overheat. Running without a thermostat is common. Without a thermostat it should run lower than 160F, so there is evidence of a blockage, probably at the manifold outlet. My thermostat keeps the temperature at 160. Let us know what you find at the manifold outlet.

Good advice... I'll check the manifold and get back to you over this weekend.

Try disconnecting pieces of the cooling system and blowing through the hoses. If you can't blow through the manifold, check the manifold outlet - classic place for stuff to hang up. Blow through the hose from the water pump to the block - piece of dead carp hung up in the inlet to the side plate? You get the idea.
Worst case I see is that you'll have to remove the head and chip the corrosion deposits out of the small passages adjacent to the valves. I think an acid flush would be a waste of time/effort.

Hey Al... I've taken the step and checked every hose on the fresh water side of the motor.

There doesn't seem to be any blockage... In fact the Prestone coolant I'm using oozes out freely even with no pressure from the pump.

Checked the out flow on the manifold, took the fitting off... and the passages are clear. Even measured the depth of the fitting and compared it to the depth of the threaded hole on the manifold, just in case it bottoms out inside and restricts coolant flow. Not the issue site there is at least a half inch clearance for fluid to flow.

During this check I drained all of the Prestone coolant in the heat exchanger... Toped it up again with Preston... Went to start the engine and to my dismay the exhaust water came out a murky orange color. I've noticed this before over this summer but thought it was my imagination.

Does this mean that my overheating issue stems from the heat exchanger?? It's the only place where the raw / coolant come in close proximity.

Assuming your coolant is orange, your HX is internally breached and needs replacement. You can further check this by running water thru the raw water part and seeing if it comes out the coolant part, or vice versa. If the zinc in the HX has been allowed to disintegrate, this can happen.

I heading down to the boat over the weekend to have a closer look at the HX Going to pull the anode out and look at that... This whole thing is starting to be irritating as why the engine continues to overheat.

I still have my HX if you need it and the price will be decent. Not sure what customs will do to you. Say $150 + shipping?
FYI - the first A4 in our C&C 35 was trouble free for thousands of miles including 3 round trips to Bermuda, which isn't much of a brag for a car but is for a 6 knot boat
The second one was a nightmare due to bad previous owner issues, so that got yanked and number 3 has been an absolute jewel. The normal state of this engine is that it works well, so you can get back to that!

Hey Orion,
Been off this thread for a while - did you ever try running it raw water cooled? Looks like you've gotten some indication that your HX is faulty. Easy to fix.
I also suspected coolant passage blockage in the block - did that ever get resolved or is it still suspect?